Comcast to seek 79% of Jones

Cable operator in city wants more of firm with outlets in D.C. suburbs

Cable television

August 10, 1999|By Mark Ribbing | Mark Ribbing,SUN STAFF

Comcast Corp. unveiled a plan yesterday that would double its stake in another cable television company, Jones Intercable Inc. Philadelphia-based Comcast, which has emerged as the dominant cable firm in Baltimore and through much of the mid-Atlantic region, is offering $840 million in its stock for 16.5 million Jones shares.

If Jones' shareholders accept the offer, Comcast's ownership stake in Jones would rise from 39 percent to 79 percent.

Comcast is offering the equivalent of $50.31 a share -- a premium of 12.7 percent over the common shares' Friday close and a 9.1 percent premium for the Class A shares.

Jones' common shares rose $2.625 yesterday to finish at $47.25 while its Class A shares increased $1.0625 at $47.1875. Comcast's stock slipped 93.75 cents, closing at $32.

Jones common shares had traded as high as $56.875 in May.

"This is really the first opportunity we've had to buy an increased stake in Jones from the public shareholders," said

Marlene Dooner, Comcast's senior director of investor relations. "We're really excited about having an increased equity stake in a company like Jones."

The stock swap would build on Comcast's earlier purchases of Jones stock.

On April 7, Comcast completed a $700 million purchase of Jones shares.

The deal gave Comcast a 37-percent equity interest in Englewood, Colo.-based Jones, a 75-percent voting stake on Jones' board of directors, and access to new cable markets, including properties in Anne Arundel, Prince George's, Calvert, Charles and St. Mary's counties as well as in Northern Virginia. In July, Comcast paid another $50 million for 1 million additional shares of Jones.

Mark Holmes, an associate analyst with A. G. Edwards & Sons Inc., said Comcast's bid addresses earlier questions about what its purchases of Jones shares would mean for holders of the stock.

Yesterday's announcement came as Comcast released its second-quarter earnings. The company posted a net income of $824 million, $1.01 per diluted share. During the corresponding period in 1998, Comcast had a net loss of $84.8 million, 13 cents per diluted share.

The most recent earnings sheet includes Jones' financial results as well as funds from the $1.5 billion breakup fee that Comcast received after it lost out to AT&T Corp. in a battle to take over cable chain MediaOne Group Inc.

Pub Date: 8/10/99

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